Easy Efforts Company is in the process of setting a target price for its coffee mug heaters and portable hard drives. The marketing department has projected impressive sales as soon as they launch. Cost data relating to the coffee mug heaters and portable hard drives at a budgeted volume of 4,000 units is as follows: Unit Cost Direct Materials $120 Direct Labour $150 Variable Manufacturing overhead cost $25 Variable selling and Administrative expenses $15 Total Cost Fixed manufacturing overhead cost $650,000 Fixed selling and administrative expenses $255,000 The company has a desired ROI of 36% and it has invested $2,500,000 in assets. Required: Compute the total cost per coffee mug heaters and portable hard drives. Compute the desired ROI per coffee mug heaters and portable hard drives. Compute the mark up percentage using total cost per coffee mug heaters and portable hard drives
Question 1
Easy Efforts Company is in the process of setting a target price for its coffee mug heaters and portable hard drives. The marketing department has projected impressive sales as soon as they launch.
Cost data relating to the coffee mug heaters and portable hard drives at a budgeted volume of 4,000 units is as follows:
Unit Cost
Direct Materials $120
Direct Labour $150
Variable
Variable selling and Administrative expenses $15
Total Cost
Fixed manufacturing overhead cost $650,000
Fixed selling and administrative expenses $255,000
The company has a desired ROI of 36% and it has invested $2,500,000 in assets.
Required:
- Compute the total cost per coffee mug heaters and portable hard drives.
- Compute the desired ROI per coffee mug heaters and portable hard drives.
- Compute the mark up percentage using total cost per coffee mug heaters and portable hard drives
- Compute the target selling price of a coffee mug heaters and portable hard drives.
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